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GAO reviewed the Theater High Altitude Area Defense (THAAD) User Operational Evaluation System (UOES) program, focusing on whether planned testing would reasonably demonstrate the capabilities of UOES as an interim system before funds are committed to interceptor production.

GAO found that: (1) the Army purchased 20 interceptors for demonstration and validation flight tests, of which only 14 will be used in these tests; (2) the Army plans to commit funds for UOES production based on the results of the first 7 of the 14 scheduled flight tests; (3) transporting UOES interceptors from the United States to a theater of operations will require significant airlift resources that may not be available unless UOES is afforded a high priority; (4) the cost estimate for the 40 UOES interceptors has increased from $80 million to $165 million, and THAAD project officials expect that estimate to rise to $220 million; and (5) delivery of the 40 UOES interceptors will be delayed due to increased delivery lead times and reduced fiscal year (FY) 1997 funding.

Matter: Because the Department of Defense has clearly indicated its intention to commit over $200 million for UOES interceptors which may have inadequate operational effectiveness and because the current schedule will provide only 14 of the 40 interceptors that will be needed, Congress may wish to consider delaying the timetable for acquiring THAAD UOES set forth in the 1996 Defense Authorization Act.

Matter: Congress may wish to restrict obligational authority for acquiring UOES until the Secretary of Defense certifies that the system has adequate operational effectiveness to merit its deployment in a national emergency.

Recommendation: To avoid committing over $200 million for a system that may not have adequate operational effectiveness, the Secretary of Defense should restrict obligational authority for UOES interceptors until the Chairman of the Joint Chiefs of Staff certifies that UOES has adequate effectiveness to merit deployment as an interim system.

Recommendation: To avoid committing over $200 million for a system that may not have adequate operational effectiveness, the Secretary of Defense should seek legislative relief from the requirements of the 1996 National Defense Authorization Act in regards to acquiring THAAD UOES by FY 1998.